Jaimie Abbott: Well, my guest today here on pitch Perfect is Erin Davis. Now, Erin helps women stay in control of their finances and, in control of their money so they can step into the rest of their life with confidence. She understands financial clarity is the key ingredient in moving your business from where it is now to where you want to go now. Being a qualified accountant with 30 plus years experience, Erin has helped hundreds of businesses manage millions of dollars and become financially strong. But it's not all about the numbers for Erin. She believes that being in control of your money allows you to step into the rest of your life with confidence, because when you are confident, you walk taller, smile more, jump at opportunities, and just feel amazing. Erin helps you to become the most confident woman in your work, money and play. And she does this through her financial wellness checkups, financial wellness strategy, and her podcast, her confidence code, and her high level one on, one coaching. While there's a strong focus on emotions, energy, and beliefs to reduce her clients mental load, Erin also educates, supports, and empowers women with practical money, knowledge and tools. Erin is the accountant in your back pocket, and with her guidance, female business owners will transform their relationship with money, unlock their full financial potential, and ultimately live life with confidence and purpose. Erin Davis, welcome to Pitch Perfect.
Erin Davis: Thank you. Thank you for having me.
Jaimie Abbott: I love that bio. It's just so practical, and it's all about the what's in it for me factor with your audience. So I've got so many questions to ask you. This is, of course, the second time you've been on pitch perfect, and you are one of my fabulous paid to speak alumni members and my current PR club members as well. Financial literacy, how important is it in, this day and age, especially for women?
Erin Davis: I think it really is everything. It comes back. It's really the backbone that everything is built on. So, if you are, struggling to understand your money and you're worried about your financial statements or in your business, it just carries such a huge mental load that I think we sometimes don't really give enough credit to and realize just how much it is impacting things. So, while it tends to be a bit of a silent thing, it really is very heavy when you don't understand your money and you don't understand your financial statements.
Jaimie Abbott: And so I think there's a statistic that you talk about a lot, with women and not being financially, savvy and financially literate. How does that kind of work? And why is it the thing that women don't know so much about money compared to men?
Erin Davis: Well, I think it. It just think it has a lot to do with our upbringing. Like, things are changing, times are changing, but we're still in that generation where our mums weren't really taught anything about money. They weren't allowed to have their own money, or they weren't across the family finances. So while things are changing, we are still in that space where a lot of women don't understand. We're not taught it at school, we're not taught those practical household budgeting tips, you know, how to manage your money. Everything is very instant. Like, we're instant gratification at the moment, and we just tap and pay for everything and then think about it later. So we get sort of stuck in this cycle of, just going along and not really understanding. So I think it is definitely changing. We are definitely becoming more financially literate, and we are moving towards that space. However, we still have a long way to go. And the women that I talk to, particularly in my accounting role, is that they just pull the doona over their head, stick their head in the sand, just carry on like everything has been normally, but it is that pressure and that, unseen mental load that they're carrying that creates the stress and the overwhelm and that worry, which means that then everything else is impacted.
Jaimie Abbott: You mentioned that it is changing. So what can we do to improve our financial confidence?
Erin Davis: Well, I think the first part is really the awareness. It is you need to draw that line in the sand, get out from under the doona, stop sticking your head in the sand, and just start to be aware of what it is that you're not understanding where. Where you're feeling some worry. And then it's about learning. So the awareness is really the first part because we don't know what we don't know. Right. We're in that space of, just carrying on. But I think it's taking notice of that heavy load that we're feeling. And when you start to feel that worry or that heaviness or you can't sleep at night, it's keeping you up. It's recognizing that that is the first step of something needs to change. And I think once you have that, that awareness, then you can open yourself up to learning new things and being able to receive all of the information out there because we've got so much information available to us. You can google anything, but it's like, well, is this the right thing for me? Am I finding the right information? There's just so much overload. But when you start to open yourself up to thinking, well, there is possibly another way, or I need to learn some more things, or, you know, there's somebody out there to help me, then you're able to really start to draw in the information that you need, and that awareness creates a huge, opportunity for you to change what's been happening.
Jaimie Abbott: Yeah. So I guess, what about. We have a lot of people who listen to this podcast who want to start a business. So, I just want to take a step back because I've learned a lot of things along the way, even basic things, such as putting money aside for when the tax bill happens. And I didn't do that at first, and I almost now put away like 40% of my income into a separate account. I followed the profit first model, not to a t, but generally I'll try and put aside 40% into my tax account, but I didn't always have it that way. And I really, when I first started business, was, in first started my business eleven years ago, I was really struggling with that. What can people do when they first start their business? To set it up correctly, to have a lot more financial confidence from the get go.
Erin Davis: And I think that's the thing, right? people have that passion to start a business, but they don't realize there's all of these other things that need to happen. And I think being a business owner, it's your responsibility to be financially literate and to financially understand what it is that you need to do. So I would really set yourself up from the beginning how you want to end. So it's separate bank accounts, it's keeping your personal money separate, separate to your business money, and they really shouldn't overlap. You know, you need to set yourself up in those good systems and processes. Record keeping is absolutely paramount. It will cost you a fortune at your accountant if you're not organized and you don't have things available to them. So you don't necessarily need to set yourself up on software like Xero or reckon or MYOb, Quickbooks, any of those type of ones. There's other ones out there, too. You don't necessarily have to go down that path, particularly when you're first starting out. However, you do need to have a system and a process in place that accurately records all of your income and expenses. So those online platforms are, great because a lot of them, you can save your receipts in there, so, you know, you can get rid of the paperless, or you can become paperless. You don't have all that mountain of paperwork and you're losing receipts. So that is really handy. But if you're just starting out, you don't necessarily have to go down that path. I would suggest, though, that you have a conversation with an accountant or, even a bookkeeper, because they are really good at setting up systems and processes before you start and understanding what your obligations are, because it's really hard, once you're already in it and amongst it, to then backtrack and set yourself up. to start with another thing that is really, really important. If you have staff, you need to make sure you pay your super. it is absolutely crucial that you pay your super. So, setting up a separate bank account for your GST, which you may or may not be registered for just at the outset, but those taxes. So your personal tax, business tax, and super need to have a separate bank account and be having the money set aside and make sure it gets paid. Not paying you super, for a business owner is disaster. It ends up not being tax deductible, it ends up costing you interest and penalties, and it causes you to have unhappy staff too, because you're not paying them what they're entitled to. So I think from the very beginning, you need to just set yourself up in that right process and understand what your compliance obligations are. and I really feel like a business, if you're in business, you have a responsibility to comply. You know that it's part of being in business. So you need to educate yourself as to what are the compliance, what are the deadlines. You know, make sure if you lodge a Baz that your file is reconciled and it's not just being lodged on the day it's due. You know, we have plenty of time. You just need to be organized and see this as a crucial part of running a business.
Jaimie Abbott: Don't get me started on leaving things to the last minute. and lodging forms like the New South Wales Liberal Party without council elections. I just thought of that straight away. Yeah, because it's very similar. You've got plenty of time. You know, the date in advance.
Erin Davis: Yeah, and the date. We have been in the GST system for a long time now. The due dates for lodgement are exactly the same every quarter. It just rolls around. And you would be surprised at the number of bazs that I still have to prepare, even this quarter, because clients haven't got their file up to date. Now, if they don't have their file up to date, it means they're not running reports, it means they're not looking at their financial statements, it means they're just flying by the seat of their pants, sort of winging their business. And you get a bit of an idea when you're in business because you've got money in the bank or you don't, but you don't have any idea on that, you know, how long is it taking for you to collect your money? How much have you got outstanding? It's really hard to make good, good, sound financial decisions if your file's not up to date. So I don't know how these businesses are thriving when their information's not accurate.
Jaimie Abbott: Yeah, I mean, I probably would fall into that category of winging it. I, guess, you know, you talked about setting it up right from the start. What about if you're setting it up and it's just you in the beginning setting up your business? Should you pay yourself a salary, or should you be paying yourself super, or how does it kind of work? What do you recommend when you're starting out? because I know not everyone can afford to pay themselves a salary, and you kind of want to reinvest any money you're making back into the business. What's your advice there?
Erin Davis: Well, it depends on your structure that you have. So if you're just a sole trader, a small business, then you would pay yourself an allowance. And I think that is really coming back to the very beginning with the budget, what you're expecting your income to be. And, you know, cash flow is quite tight at the very beginning. It's. It's hard to, project what's going to happen. However, it's really important that you do reward yourself and you celebrate what's happening in your business, and you need to be able to, well, we want to make a profit. If you're not making a profit, then are you really in business now? You can purposely make a loss, but, that's not sustainable. Unless you have super deep pockets, it's not sustainable, and why would you do it? So reinvesting in your business is a good idea, and it's really just about finding that balance. And if you're unsure about what that balance needs to be, then that's when you have a conversation. And I know that a lot of people hesitate with seeking out financial wellness advice or accountant advice, but I really feel like, particularly in those early days, that advice is so valuable because it sets you up and it sets up what is right for you because everybody is an individual, or it's really hard to say, well, you need to just pay yourself, you know, 30% of what, what you're generating or whatever that needs to be because it's so individual. What else are you doing for income? What, government payments do you receive? Because that impacts things, you know, what's your spouse earning? What are your commitments, your weekly commitments? So it's really hard to just say, well, pay yourself this. It really needs to look at your whole scenario and your whole situation. But, you know, reinvesting in your business is super important, but there has to be a balance. You know, it has to be sustainable and you have to be generating enough to, to pay yourself because that's the ultimate goal, right, to, to pay yourself. Whether that then moves yourself into a different structure and you have different, requirements as to wages and super and those type of things. But if you're just running a, your business as a sole trader, so that's just by yourself, there's no requirement to actually pay yourself super at all. You can and it will get you a tax deduction and which is great, but super is then locked away. So super then becomes a whole nother strategy of, well, what's the right amount to put in? And that's advice from a financial planner, not an accountant. So, you know, there's different, things that we can advise on and things that we can't. But it's really important to look at that individual circumstances. But, you know, I think to answer your question, that, reinvestment in the business is really important because you want to grow and you want to move forward and move out of this early startup stage. But then it's also important to have that really good advice at the beginning and set yourself up and then value that advice. Don't see it as a burden or a cost. Look at it as, it's an education piece. It's improving the financial literacy, it's improving my business financial responsibility. And from there you start to learn and grow. And that builds your confidence.
Jaimie Abbott: Yeah, absolutely. One of the speaking topics, because you are a speaker, of course, as well, and you've spoken at some, large, events in the hunter region here where we live. one of your topics is all about how to make financial wellness your superpower. What do you mean by that?
Erin Davis: Well, I think you can really own that financial wellness space and you can either let it control you or you can take, can take control of it. And I think when you understand your money and understand your business financials, it then allows you to make really smart, confident decisions. And, you know, modern women need, to make financial decisions and they need to be confident in that space. So there are a lot of women that struggle in particular still with this financial wellness piece and that financial literacy. So if you're able to understand what your money is, how to generate it, how to save it, how to stop leaking it, how to make it grow, and how to make it, make you feel good, then that is going to put you a, step ahead of other people around you, because there are so many people that are hiding behind closed doors that really don't get it and don't understand it, and they don't feel comfortable about it.
Jaimie Abbott: Yeah, absolutely. So how do you help people? Do you ideally want people when they're starting their business or people who are quite established and really have no grip on their finances in their business?
Erin Davis: Look, I. I, love all working with a lot of different women in a lot of different spaces because I really find that startup is great because you can handhold and you can be that support person. And I really love the connection and the network and I being that support person for people. But then I also love that bit further along, too, that have got a business that have been running their business for a while, but they're wanting more. They're feeling tired and exhausted and overwhelmed and even a bit isolated, because being in business can be quite isolating, but they want to do more and they want to take it to that next level. So I love working in that space, too, because those women are, they're open for change. They're ready for change, they're ready for growth, they're ready for that next step. And they can see that improving their financial literacy and wellbeing will then catapult them to that next level, whatever that level needs to be.
Jaimie Abbott: Yeah, absolutely. So if people want to get in touch with you, how can they find you?
Erin Davis: Well, I am across all the socials. Erindavis transform. my website is erindavis.com dot au, and I have a freebie that your listeners can download. It is erindavis.com dot au kickstart. And that is really the kickstart financial wellness piece to work out where you're at, what the missing pieces are, because we need to work out where we're at at the beginning. And what is it that we're missing? Because like I said before, we don't know what we don't know. So that Kickstarter kit really just, puts it out there for. Puts it on paper so you can see black and white. Where, where are the pieces that are missing? And what, what are the bits that I'm doing well and what do I need to improve on?
Jaimie Abbott: Yeah. Great. Thank you so much for coming on to pitch perfect, Erin, and sharing your knowledge. Lots to think about. lots to kind of give me a kick up a b***. as far as, you know, even, like, I. It's just kind of making me think I need to even just go through my business bank account and look at all the subscriptions, the software that I pay for. And, I really get a grip on it because it's been many, many months since I've done that, and I think that that's just been the reminder that I need. So thank you so much.
Erin Davis: That's all right. No worries. And I think when you have that information, you can then make informed decisions, and it's then about assessing. Is this right for me right now? Maybe it was right before, but it's not right now. And when you have the information, you can then make those informed decisions and really, you know, set your business up to be how you want it to be.
Jaimie Abbott: Yeah, absolutely. Erin Davis, thank you so much for coming onto Pitch Perfect.
Erin Davis: Thank you.
